In an effort to offset a potential budget shortfall of about $30 million, Stafford County Administrator Anthony Romanello is proposing a real estate tax rate increase of almost 20 cents.
So even with declining real estate values, Stafford homeowners could see higher tax bills this June.
Romanello presented the 2009 proposed budget to the Board of Supervisors yesterday. He suggested raising the real estate tax rate from 70 cents per $100 of assessed value to 89.8 cents, an increase of about 28 percent.
With that increase, the average homeowner would pay an extra $206 on his tax bill each year.
A penny on the tax rate in Stafford generates about $1.5 million.
The county is already facing about a $6.4 million shortfall this year, largely due to declining sales taxes, recordation, development and the housing-market slump. The most recent budget projections put the deficit at about $13.5 million.
However, county departments slashed their spending by 7 percent, helping save about $6 million.
The School Board also is cutting expenditures by about $1.5 million.
The tax-rate increase is necessary to meet the proposed 2009 budget, according to county officials. If the rate remains unchanged, Stafford officials are projecting a $15 million drop in revenue and about a $9 million increase in expenses. Couple this with the current $6.4 million shortfall and Stafford would begin the next fiscal year about $31 million in the hole.
"That's the gap we have to close to balance this budget," Romanello said in an interview before the proposal presentation.
The only projected revenue increase next year is the personal property tax, if the sale of new cars (which bring in higher tax revenue) are not deterred by the sluggish economy and soaring gas prices.
"It's probably been the largest revenue that's been insulated so far from the economic environment," Romanello said.
The county will still receive some funding to get its projects going next year. Stafford is getting about $2.8 million, mostly state grants, which will help fund various agencies such as social services and law enforcement.
And over the next two years, Stafford is preparing to issue $95.3 million in bonds to finance capital improvement projects. Those projects include renovation of the courthouse, a new library, upgraded Juvenile and Domestic Relations Court facilities and the installation of synthetic turf on the Smith Lake Park fields.
However, some county departments are continuing to cut costs to meet next year's budget.
An example is Code Administration, which will not fill five vacant positions next year. Instead, the department will use current staff to perform work that is usually contracted out.
"We think that we can do that work as well as, or better than, the consultants doing it," Romanello said. "They think they will be able to maintain service levels."
However, county officials plan to refill some of their 75 vacant positions, though this is the first time in a decade that Stafford is not creating new positions. County staff will also see a 2.5 percent salary increase at a cost of $1.2 million.
Overall the county budget is increasing by 2.3 percent, excluding some factors such as the debt service and capital projects.
Supervisors were wary about raising the real estate tax rate while providing salary increases for county staff. Rock Hill District Supervisor Cord Sterling said he was willing to take a pay cut to help balance the budget.
"I know people are working longer hours, but this is a troubling time," he said. "I just think we've really got to come to grips with this county budget."
Supervisors requested a list of all vacant positions and the salaries for each. Romanello noted that the current vacant positions make up almost 10 percent of the county's work force and include several key positions.
Supervisor Paul Milde, who represents the Aquia District, was concerned about how the proposed tax-rate increase would impact commercial property owners. Commercial property assessments shot up an average 28 percent since 2006, while residential values dropped an average 15 percent.
"I've got to imagine under 89.8 cents, they're just getting crushed," he said.
If the economic slump continues, the county has a $1.6 million cash capital fund to use, or it could leave more vacancies unfilled.
"Those are really the only two rabbits we can pull out of the hat if the economy gets worse," Romanello said.
In the meantime, the county's financial practices are closely being monitored by the three national bond-rating agencies. Last month the agencies reissued Stafford's AA stable-outlook bond rating, meaning the county can still borrow money at a low interest rate to help finance projects.
"They did offer what I would call cautious optimism to the county," Romanello said. "They think we're doing great things, they're very pleased but they're watching."
The board is scheduled to hold a public hearing on the proposed budget and tax rate on April 15. Supervisors will adopt a budget and tax rate on April 22.
Kafia Hosh: 540/735-1977
Email: khosh@freelancestar.com
The Board of Supervisors voted 5-2 last night to reclassify 489 acres in the courthouse area now zoned for industrial and agricultural use to an office commercial zone. Supervisors originally considered rezoning the area to an urban commercial classification. However, the office commercial zone allows for some light retail uses, but is mostly tailored for premier office space that could attract more white-collar jobs.
Several business owners and officials of the industrial entities along Wyche Road and Venture Drive spoke out against the rezoning. They encouraged the county to conduct a thorough analysis and feasibility study of the area before any rezoning is considered.
Industrial or agricultural companies within the reclassified area will be significantly impacted by the zoning change.
They are now considered "nonconforming," meaning they can never expand or rebuild if they suffer a loss of more than 50 percent in value from an accident such as a fire. Their only other option is to apply for conditional-use permit--a process that is not guaranteed and could take up to a year. The county also can impose limitations on the permit.
Supervisor Milde voted against the office reclassification. He originally championed the urban commercial zone, which is geared toward retail and service industries. Griffis-Widewater District Supervisor Bob Woodson cast the other dissenting vote, citing a more thorough analysis of the area before a reclassification is considered.
The new zoning would redevelop the courthouse area into a town-square, pedestrian-friendly community with shops and tree-lined sidewalks. The rezoning would be more conducive to three planned projects, such as the new Interstate 95 interchange at Exit 140, the new public safety building, and the Stafford Hospital Center currently under construction. --Kafia Hosh |